Question 1

Are there any risks for a corporation that uses long-term debt financing? Support your answer.

Accepted Answer

Yes, there are risks for a corporation t...

Question 2

What types of businesses obtain venture capital financing? How does venture capital differ from a private placement?

Accepted Answer

Venture capital financing is typically o...

Question 3

Slater Co. has very old computers and manufacturing equipment and knows it needs to upgrade them or risk losing much of its business. Slater does not have the money to purchase the computers, so it will most likely need

Accepted Answer

A)   a short-term loan.
B)   to keep using the old computers.
C)   to deduct the cost from employees' salaries.
D)   long-term financing.
E)   to use increased cash flow from sales.F) A) and E)
G) None of the above

Question 4

When a corporation uses an initial public offering to raise capital, the stock is sold in the

Accepted Answer

A)   primary market.
B)   secondary market.
C)   unsecured financing market.
D)   securities exchange.
E)   over-the-counter market.F) B) and D)
G) A) and E)

Question 5

When compared to common stockholders, preferred stockholders have a priority claim on corporate assets.

Accepted Answer

A) True 
 B)False

Question 6

A marketplace where member brokers meet to buy and sell securities is known as

Accepted Answer

A)   the primary market.
B)   the supplemental market.
C)   the overseas market.
D)   an IPO.
E)   a securities exchange.F) D) and E)
G) C) and D)

Question 7

With regard to the ongoing expense of long-term corporate financing, which of the following would be the least expensive?

Accepted Answer

A)   Long-term loans
B)   Corporate bonds
C)   Debenture bonds
D)   Common stock
E)   Trade creditF) A) and B)
G) A) and E)

Question 8

Since the financial crisis peak in 2009, what goals were proposed by the U.S. House of Representatives and Senate? Briefly discuss the benefits and drawbacks of such proposals.

Accepted Answer

Since the financial crisis peak in 2009,...

Question 9

Bonds that are secured by various assets of the issuing corporation are called debenture bonds.

Accepted Answer

A) True 
 B)False

Question 10

Debt capital is borrowed money that does not have to be repaid.

Accepted Answer

A) True 
 B)False

Question 11

For a corporation, equity capital is obtained from

Accepted Answer

A)   bondholders.
B)   banks.
C)   stockholders.
D)   insurance companies.
E)   credit unions.F) All of the above
G) C) and D)

Question 12

Effective financial management involves careful planning to determine the best financial sources and to ensure that projected uses are in keeping with the organization's goals.

Accepted Answer

A) True 
 B)False

Question 13

William owns 100 shares of Textron convertible preferred stock. To what can this preferred stock be converted in most companies?

Accepted Answer

A)   A different type of preferred stock
B)   Common stock
C)   Corporate bonds
D)   Trade credit
E)   Retained earningsF) A) and E)
G) A) and D)

Question 14

Rosemary Wyatt bought preferred stock issued by General Products, Inc. The stock has a par value of $100 and pays 7 percent. The dividend for this preferred stock issue is

Accepted Answer

A)   $1.00.
B)   $3.25.
C)   $3.88.
D)   $5.12.
E)   $7.00.F) A) and E)
G) A) and D)

Question 15

Venture capital is money invested in small firms that have the potential to become very successful.

Accepted Answer

A) True 
 B)False

Question 16

Jacob and Molly decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered

Accepted Answer

A)   sales revenue.
B)   long-term debt.
C)   equity capital.
D)   short-term financing.
E)   cash flow.F) A) and B)
G) A) and E)

Question 17

As a stockholder in the Giant Plants Company, you have the right to vote on all of the following issues except

Accepted Answer

A)   amendments to the corporate charter.
B)   the price the firm charges for its products.
C)   the sale of certain assets.
D)   new issues of preferred stock or bonds.
E)   changes in the amount of common stock issued.F) B) and D)
G) B) and E)

Question 18

Retained earnings are

Accepted Answer

A)   all the earnings of the corporation.
B)   profits before taxes.
C)   profits after taxes.
D)   undistributed profits.
E)   total owners' equity.F) A) and B)
G) A) and E)

Question 19

To be successful while pursuing a career in finance, an employee must

Accepted Answer

A)   graduate from a four-year university.
B)   have a strong background in accounting or mathematics.
C)   have fifteen years of experience.
D)   be driven by a motive to become very rich.
E)   start a career as a bank officer.F) None of the above
G) A) and D)

Question 20

Commercial paper is short-term promissory notes issued by large corporations.

Accepted Answer

A) True 
 B)False

Exam 19: Mastering Financial Management

William owns 100 shares of Textron convertible preferred stock. To what can this preferred stock be converted in most companies?

Correct AnswerverifiedShow Answer

A marketplace where member brokers meet to buy and sell securities is known as

Correct AnswerverifiedShow Answer

Since the financial crisis peak in 2009, what goals were proposed by the U.S. House of Representatives and Senate? Briefly discuss the benefits and drawbacks of such proposals.

Correct AnswerAnswered by ExamLex AISince the financial crisis peak in 2009,...View AnswerShow Answer

What types of businesses obtain venture capital financing? How does venture capital differ from a private placement?

Correct AnswerAnswered by ExamLex AIVenture capital financing is typically o...View AnswerShow Answer

To be successful while pursuing a career in finance, an employee must

Correct AnswerverifiedShow Answer

As a stockholder in the Giant Plants Company, you have the right to vote on all of the following issues except

Correct AnswerverifiedShow Answer

Debt capital is borrowed money that does not have to be repaid.

Correct AnswerverifiedShow Answer

Jacob and Molly decide to start a new cake-decorating business. They each contribute $10,000 to get the business off the ground. This money is considered

Correct AnswerverifiedShow Answer

Retained earnings are

Correct AnswerverifiedShow Answer

Bonds that are secured by various assets of the issuing corporation are called debenture bonds.

Correct AnswerverifiedShow Answer

Venture capital is money invested in small firms that have the potential to become very successful.

Correct AnswerverifiedShow Answer

With regard to the ongoing expense of long-term corporate financing, which of the following would be the least expensive?

Correct AnswerverifiedShow Answer

Effective financial management involves careful planning to determine the best financial sources and to ensure that projected uses are in keeping with the organization's goals.

Correct AnswerverifiedShow Answer

Slater Co. has very old computers and manufacturing equipment and knows it needs to upgrade them or risk losing much of its business. Slater does not have the money to purchase the computers, so it will most likely need

Correct AnswerverifiedShow Answer

Are there any risks for a corporation that uses long-term debt financing? Support your answer.

Correct AnswerAnswered by ExamLex AIYes, there are risks for a corporation t...View AnswerShow Answer

For a corporation, equity capital is obtained from

Correct AnswerverifiedShow Answer

When a corporation uses an initial public offering to raise capital, the stock is sold in the

Correct AnswerverifiedShow Answer

When compared to common stockholders, preferred stockholders have a priority claim on corporate assets.

Correct AnswerverifiedShow Answer

Rosemary Wyatt bought preferred stock issued by General Products, Inc. The stock has a par value of $100 and pays 7 percent. The dividend for this preferred stock issue is

Correct AnswerverifiedShow Answer

Commercial paper is short-term promissory notes issued by large corporations.

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
Since the financial crisis peak in 2009,...
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Venture capital financing is typically o...
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Answered by ExamLex AI
Yes, there are risks for a corporation t...
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